Rs 300 Crore Capital Boost! Major NBFC Strengthens Its Lending Business

Strategic Move to Strengthen Housing Finance Arm and Drive Future Growth

Aditya Birla Capital Limited (ABCL) has invested Rs 300 crore in its wholly owned subsidiary, Aditya Birla Housing Finance Limited (ABHFL), on a rights basis. This investment aims to support the growth of ABHFL and improve its leverage ratio. Despite the investment, ABCL's shareholding in ABHFL remains unchanged at 100 per cent.

Transaction Nature and Purpose
Since ABHFL is a wholly owned subsidiary of ABCL, this transaction qualifies as a related party transaction. However, it has been executed at arm’s length. The primary purpose of this investment is to provide financial support to ABHFL, ensuring its capacity to expand its housing finance portfolio.

Industry and Regulatory Approvals
ABHFL operates in the housing finance sector, a critical industry that supports home ownership in India. No governmental or regulatory approvals were required for this transaction, as it involved the subscription of equity shares on a rights basis.

Financial Consideration
ABCL has subscribed to the equity shares of ABHFL for an aggregate cash consideration of Rs 300 crore. The payment was made entirely in cash, and the shares were allotted to ABCL on March 10, 2025.

Impact on Shareholding and Control
Despite the investment, ABCL continues to hold 100 per cent ownership in ABHFL. There is no change in the company’s control over its housing finance arm.

Background of ABHFL
Aditya Birla Housing Finance Limited is a key player in the housing finance sector, offering a range of home loan products. Over the past three years, the company has experienced significant portfolio growth, supported by digital innovations and distribution expansion. It operates across India, catering to various segments of homebuyers.

Conclusion
This investment aligns with ABCL’s strategy of strengthening its subsidiaries to drive long-term growth. By infusing capital into ABHFL, ABCL ensures the company’s financial stability and expansion potential in the housing finance sector. The move reflects ABCL’s commitment to reinforcing its market presence and supporting its subsidiary's growth trajectory.

Disclaimer: The article is for informational purposes only and not investment advice.